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Sir, 1. Under NFSA the buffer stock requirement is 60 mt and India's procurment in 2012-13 was 61 mt, so I don't think India has a lot more than what it has to provide under NFSA. Yes the present buffer stocks exceed 80 mt(previous year accumulations) but that's because we haven't had a drought for the past 4 years. Whichever year monsoon gods don't favour us the stockpile is going to go down drastically. So given the fluctuations in output(due to monsoons) we should have the freedom to stockpile at least above 60mt - and this figure would violate WTO AoA rules. 2. In many of our hinterland areas PDS shop is the only provider of grains. Cash transfers and bank accounts won't work properly with illiterate and un-informed poor. 3. We have to provide security to marginal farmers who have no insurance and the FCI is the only agency which would procure their gains as soon as harvested.

Suraj Gupta , India 11/08/2014 18:26:08

In 2009, when we had a big drought, the government supplied 50 million tonnes but bought 57 million tonnes. So even in this year, we built up stocks. In fact, procurement has exceeded distribution every year since the early 1990s. Yes, emergency reserves are necessary but for that to achieve desired ends, India must have stocking norms and protocols for stock addition and depletion. The WTO might well be persuaded then. Carrying stocks without a design for their proper use is costly. According to the FCI annual report for 2012/13, the carrying cost is nearly Rs. 7 per kg. NSS data shows that only a very small percentage of the population depends entirely on the PDS. Anyway, even under the NFSA, PDS will supply only about half or less of an individual´s grain consumption. Retail grain outlets are pretty much everywhere. Whether the poor are able to use bank accounts and cash transfers effectively is an empirical question. The few pilots have not thrown up evidence to the contrary. More studies are needed and the payments infrastructure needs to be built up. There is little doubt that poor farmers need insurance - but does that justify procurement well in excess of distribution. The cost of carrying excess stocks is large and can instead be used to build infrastructure that would drought proof agriculture.

17/08/2014 12:25:21

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